The basic argument I hear is that advisors will not recommend annuitization because they will no longer have a lump sum on which to charge fees or generate future commissions. Regardless of their compensation method, I see no evidence that the majority of advisors are recommending against paying off high-interest debt, gifting to family or making charitable contributions. Those are just three things that even mediocre advisors routinely and actively recommend to clients that also removes money from an investment portfolio.
The lack of availability to funds affects clients far more profoundly than it does advisors. I'll have much more to say about this lack of availability next month as it is one of many reasons clients reject these products.
Dan Moisand, CFP has been featured as one of the America's top independent financial advisors by most leading financial advisor publications. He has spoken to advisor groups on five continents on topics such as managing investments and navigating tax complexities for retirees, retirement readiness, and most topics relating to the development of the financial planning profession. He practices in Melbourne, FL. You can reach him at [email protected]